An Extended Cost-Effectiveness AnalysisThe Distributional Consequences of Increasing Tobacco Taxes on Colombia’s Health and Finances

James, Erin; Saxena, Akshar; Restrepo, Camila Franco; Llorente, Blanca; Ortiz, Andrés Vecino; Uribe, Manuela Villar; Iunes, Roberto F.; Verguet, Stéphane

doi:10.1596/28598

Cited by 1 publication

(2 citation statements)

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“…The finding above is central for middle-income countries which would want to take the appropriate measures of the WHO FCTC, but where parliaments and governments hesitate based on the impact on their citizens. In the case of Colombia, tobacco prices are still some of the lowest on the continent despite recent tax hikes in 2017, and further efforts are required [ 12 , 49 ]. In general, countries might contain adverse effects on household budgets due to taxing temptation goods when they expand their social security programs.…”

Section: Discussionmentioning

confidence: 99%

“…The tobacco epidemic disproportionally affects low socioeconomic status (SES) households [1][2][3][4][5][6]. Global efforts such as the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) have decades of promoting policies aimed at reducing smoking prevalence, especially tax increases, which have proved to be effective [7][8][9][10][11][12]. Yet, evidence shows that the demand for cigarettes is inelastic and households try to sustain their habits even if they have to reallocate their expenditures [13][14][15].…”

Section: Introductionmentioning

confidence: 99%

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Inequality of the crowding-out effect of tobacco expenditure in Colombia

Gallego,

Paraje,

Rodríguez-Lesmes

2024

PLoS ONE

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In recent decades, policy initiatives involving increases in the tobacco tax have increased pressure on budget allocations in poor households. In this study, we examine this issue in the context of the expansion of the social welfare state that has taken place over the last two decades in several emerging economies. This study explores the case of Colombia between 1997 and 2011. In this period, the budget share of the poorest expenditure quintile devoted to tobacco products of smokers’ households doubled. We analyse the differences between the poorest and richest quintiles concerning the changes in budget shares, fixing a reference population over time to avoid demographic composition confounders. We find no evidence of crowding-out of education or healthcare expenditures. This is likely to be the result of free universal access to health insurance and basic education for the poor. For higher-income households, tobacco crowds out expenditures on entertainment, leisure activities, and luxury expenditures. This finding should reassure policymakers who are keen to impose tobacco taxes as an element of their public health policy.

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Section: Discussionmentioning

confidence: 99%